Rules for issuing redeemable preference share

Hi

Please let me inform about

1. What are the general rules for private placement of redeemable preference share by a public limited companies

2. Is there any rule(s) pertaining to allotement of redeemable preference share on private placement basis, which restrict to allot RPS to less than 50 investors only? OR

2. Is it not possible to allot redeemable preference share to more than 50 persons on private placement basis by a public limited company?

3. To whom, this redeemable preference share can be offered/issued/alloted, on private placement basis? Is there any restriction?

4. If so, then how can it be handled/overcomed,

regards

Neel

Replies (1)

Private Placement is an issue of shares/convertible securities by listed companies to select group of persons u/s 81 of Companies Act, to raise equity capital in a fast manner. The company should comply with both companies act and sebi provisions. An issue is said to be privately placed when an allotment is made to less than 50 persons. If it is made more than 50 persons, then its called public issue. If issue of share capital is being made within 2years from the date of incorporation or within 1year from the first allotment of shares, then shares are to be offered first to the exisiting equity shareholders.

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